Over the last week gold retested prices near $1150/ounce and continued to find support at that level. Since then prices have risen to $1192.88/ounce. Emerging markets Kazakhstan and Tajikistan both increased their purchases of gold in February. Putting downward pressure on the price has been India’s failure to cut the import duty on gold. A cut on the duty was expected and its failure to materialize hurts Indian demand for gold. Meanwhile in China, the government is fostering greater interest in gold by allowing a major expansion of gold mining and trading in the Middle Kingdom. But most vital to gold’s strength in the last week has been a pullback in the strength of the dollar. That pullback can be associated with new forecasts from the Federal Reserve that point to lower-for-longer interest rates.
